Thursday, January 2, 2014

Panamá: Spanish-led Consortium Threatens to Halt Work on 3rd Set of PCA Locks

According
to The Latin American Tribune, The Spanish-led consortium building a
third set of locks for the Panama Canal announced Wednesday (January 1) that it
will halt work due to the impossibility of completing the project for the
amount specified in the original contract.

The
locks are the key element in the $5.25 billion plan to double the waterway’s
annual capacity from 300 million tons to 600 million tons.

“Grupo
Unidos por el Canal sent to the Panama Canal Authority (PCA) the
pre-notification of the suspension of work, in accord with Sub-clause 16.1 of
the conditions of the contract,” GUPC said in a statement sent to EFE.

The
canal authority now has 21 days to meet GUPC’s demand for an additional $1.6
billion to cover cost overruns.

Under
the contract and relevant Panamanian law, the canal authority is responsible
for absorbing those overruns, GUPC said.

COMMENT:
Work will continue during the 21-day period, although it is presumed that work
will cease at the end of the 21 days if PCA does not authorize the
cost-overruns of $1.6 billion.

Agreeing
to GUPC’s proposal represents the canal authority’s lowest-cost option for
getting the locks completed in the shortest possible time, the consortium said.

GUPC,
led by Spain’s Sacyr Vallehermoso, began work on the third set of locks in 2007
and expects to complete construction in June 2015, nine months later than the
date prescribed in the contract.

The
consortium, whose other members are Italian firm, Impregilo, Belgium’s Jan de
Nul and Panamá’s Constructora Urbana, said it resorted to the threat of
suspension after the PCA rebuffed repeated requests for talks.

The
canal authority responded to the GUPC statement within hours, rejecting what it
described as an attempt to negotiate “outside the contract.”

If GUPC
does not fulfill the contract, the PSA will make use of existing contractual
mechanisms to ensure completion of the project, Quijano said in a brief
statement.

“No
matter what type of pressure is exercised against the PCA we main our demand that Grupo Unidos por el
Canal respect the contract that they accepted and signed,” he said.

The
contract provides for independent arbitration of disputes that GUCP and the PSA
cannot resolve through negotiations.

The
Canal, designed in 1904 for ships with a 267-meter (875-foot) length and
28-meter (92-foot) beam, is too small to handle post-Panamax ships that are
three times as big, making a third set of locks.

About Me

I retired from the US State Department in April 2006, after a career as a special agent, Senior Regional Security Officer (SRSO), director of training, chief investigator of the Cyprus Missing Persons Program, director of security of the U.S. Agency for International Development (USAID) and as a senior adviser in the Office of Anti-Terrorism Assistance.
My book, STAYING SAFE ABROAD: TRAVELING, WORKING AND LIVING IN A POST-9/11 WORLD was published in May 2008.
A complete update of STAYING SAFE ABROAD 2015, will be release during early 2015 for the iPad, Kindle and Nook and other e-readers.
I am a former Federal Firearms Dealer (US), a certified NRA pistol instructor and a certified NRA Range Safety Officer.
My career has also included 15 years as an international security consultant; for ten years I served as the security adviser to the Inter-American Development Bank.
I additionally, served six years in the Marines, which included combat service in Vietnam.
I am available for operational assignments, lecturing opportunities and in providing security solutions anywhere in the world.